FEDERAL COURT OF AUSTRALIA Axent Holdings Pty Ltd v Compusign Australia Pty Ltd [2017] FCA 1077 File number: VID 1408 of 2016 Judge: KENNY J Date of judgment: 11 September 2017 Catchwords: PRACTICE AND PROCEDURE – Application for discovery – Orders for discovery made. Legislation: Patents Act 1990 (Cth) Cases cited: Belegging-en Exploitatiemaatschappij Lavender BV v Witten Industrial Diamonds Ltd [1979] FSR 59 Mulley v Manifold (1959) 103 CLR 341 Date of hearing: 4 September 2017 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 53 Counsel for the Applicant: S K Gatford Solicitor for the Applicant: Comlaw Barristers and Solicitors Counsel for the Respondents: C H Smith Solicitor for the Respondents: Rankin & Co ORDERS VID 1408 of 2016 BETWEEN: AXENT HOLDINGS PTY LTD (ACN 096 387 370) T/A AXENT GLOBAL Applicant AND: COMPUSIGN AUSTRALIA PTY LTD First Respondent HI-LUX TECHNICAL SERVICES PTY LTD Second Respondent COMPUSIGN SYSTEMS PTY LTD Third Respondent AND BETWEEN: COMPUSIGN AUSTRALIA PTY LTD (ACN 070 157 925) (and another named in the Schedule) First Cross-Claimant AND: AXENT HOLDINGS PTY LTD Cross-Respondent JUDGE: KENNY J DATE OF ORDER: 11 SEPTEMBER 2017 THE COURT ORDERS THAT: 1. By 4:00pm on 25 September 2017 each of the respondents give standard discovery in accordance with Rules 20.14, 20.16 and 20.17 of the Federal Court Rules of documents that evidence from 2 December 2010:- (a) the promotion, sale or supply by any one of them of any variable speed limit sign or lane use sign; (b) the maintenance or repair by any one of them of any variable speed limit sign or lane use sign; (c) any authorisations or instructions given by any one of them as to the use by others of any variable speed limit sign or lane use sign; and (d) all documents that any respondent asserts to be an authorisation in writing given to them by an authority of a State for the services of that State under section 163(2) of the Patents Act 1990 (Cth). 2. The Court excuses compliance with order 1(a) and (b) if it is the case that numerous contracts have been entered into in the same or substantially the same terms, in which case the relevant respondent must provide, in place of copies of each contract, a verified list setting out for each such contract the following information:- (a) one complete contract whose terms are representative of all contracts of that kind; (b) the date of all such similar contracts; (c) the identity of all parties to all such contracts; and (d) the number of items supplied, repaired or maintained under each such contract and the date or dates of each supply, repair or maintenance undertaken pursuant to that contract. 3. The Court excuses compliance with order 1(c) if it is the case that numerous authorisations or instructions have been given in the same or substantially the same terms, in which case the relevant respondent must provide, in place of copies of those authorisations or instructions, a verified list setting out for those authorisations or instructions the following information:- (a) one complete authorisation or instruction whose terms are representative of all authorisations or instructions of that kind; (b) the date of all such similar authorisations or instructions; (c) the identity of all persons to whom all such authorisations or instructions were given; and (d) the product to which each such authorisation or instruction related. 4. The Court excuses compliance with order 1(d) in the case of any respondent that has by now provided Axent with a copy of all documents that that respondent asserts to be an authorisation in writing given to it by an authority of a State for the services of that State under section 163(2) of the Patents Act 1990 (Cth) and, in that event, directs that that respondent confirm on oath that it has in fact provided Axent with copies of all such authorisations given to it by an authority of a State. 5. Unless a party notifies the Court in writing by 4:00 pm on 14 September 2017 that it opposes this order as to costs, the respondents pay the applicant's costs of and incidental to the obtaining of these orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KENNY J: APPLICATION for discovery 1 On 2 December 2016 the applicant, Axent Holdings Pty Ltd (Axent) filed an originating application seeking relief on the basis that Compusign Australia Pty Ltd (Compusign Australia) and Hi-Lux Technical Services Pty Ltd (Hi-Lux) infringed claims 1-28 (the claims) of Australian patent number AU2003252764 (the patent in suit) for an invention titled "Changing Sign System". 2 On 24 May 2017 Compusign Systems Pty Ltd (Compusign Systems) was joined as the third respondent to the application. 3 In mid-February 2017, Hi-Lux and Compusign Australia filed a cross-claim for the revocation of the patent in suit on various grounds of invalidity. The grounds relied on by one or other of them were: lack of novelty; lack of inventive step; obviousness; lack of fair basis; lack of clarity; lack of entitlement; and secret use. 4 The hearing of the originating application and the cross-claim (on liability only) has been fixed to begin on 27 November 2017. 5 Axent has previously raised the issue of discovery; and attempts to deal with that issue informally have failed. Axent has now applied, by way of a letter dated 24 August 2017, for standard discovery in accordance with rr 20.14, 20.16 and 20.17 of the Federal Court Rules 2011 (Cth) (the Rules). No objection has been taken to the form of the application, which I indicated at an earlier case management conference would be acceptable. 6 Paragraph 1 of the orders proposed by Axent seek documents that evidence from 2 December 2010: a. the promotion, sale or supply by any one of [the respondents] of any variable speed limit sign or lane use sign; b. the maintenance or repair by any one of [the respondents] of any variable speed limit sign or lane use sign; and c. any authorisation or instructions given by any one of [the respondents] as to the use by others of any variable speed limit sign or lane use sign. d. all documents that any respondent asserts to be an authorisation in writing given to them by an authority of a State for the services of that State under section 163(2) of the Patents Act 1990. 7 Paragraph 2 of Axent's proposed orders further provide: The Court, however, excuses compliance with order 1(a) and (b) if it is the case that numerous contracts have been entered into in the same or substantially the same terms, in which case the relevant respondent may provide, in place of copies of each contract, a verified list setting out for each such contract the following information:- a. one complete contract whose terms are representative of all contracts of that kind; b. the date of all such similar contracts; c. the identity of all parties to all such contracts; and d. the number of items supplied, repaired or maintained under each such contract and the date or dates of each supply, repair or maintenance undertaken pursuant to that contract. THE parties' position statements 8 In order to assess Axent's application for discovery, it is necessary to refer to the position statements on infringement filed by each of the parties. 9 Axent filed its position statement on infringement on 23 June 2017, and amended it on 28 July 2017. In its statement, Axent alleges that the Compusign respondents' sale or manufacture of variable speed limit signs and advanced lane use signs infringe the claims of the patent in suit. As will be seen, however, by their pleadings and position statements, the respondents, while denying infringement, have sought relevantly to confine the dispute. Axent's current application for discovery raises the effect of this confinement. 10 As Axent's position statement acknowledges, the Compusign respondents have admitted that they have imported and sold into Australia components for, and manufactured, promoted, sold and supplied, repaired and replaced in whole or in part in Australia, variable speed limit signs for traffic control on roadways. Indeed, Compusign Systems says that it intends to continue to engage in this conduct. 11 Axent also alleges that Hi-Lux's sale and manufacture of a speed limit series of products and lane use series of products infringe the claims of the patent in suit, and acknowledges that Hi-Lux has made some relevant admissions. Like the Compusign respondents, Hi-Lux has admitted that, in Australia, it has manufactured, sold and supplied, offered to sell and supply, and kept for these purposes variable speed limits signs and that these variable speed limits signs include versions that have pre-programmed displays and versions that its customers program. Hi-Lux has also admitted listed features of its variable speed limits signs. 12 In its position statement, at paragraph 20, Axent affirms that "[e]ach of the respondents has admitted that they are manufacturers of variable speed limit signs. They have also admitted various other acts of infringement". As its position statement shows, however, Axent alleges different types of infringing conduct. 13 In paragraphs 21–22 of its position statement, Axent alleges that the respondents have: a. instructed, further or alternatively, directed, procured or induced, others to use their systems so as to infringe each of the claims of the patent; b. authorized others to infringe each of the claims of the patent; c. joined in a common design with others to infringe each of the claims of the patent; and d. contravened section 117 of the Patents Act. Axent alleges that "[t]his is through [the respondents] providing detailed specifications for their sign systems, operating and maintenance manuals and other documentation to United Group Infrastructure (UGL) ". 14 Further, Axent alleges, in paragraph 23 of its position statement, that: a. each individual supply, as well as being an act of primary infringement – and also to the extent that it is not: if, for example, a controller is not supplied (which Axent denies, as each sign contains a CPU) – is an infringement of the kind listed in paragraph 20; and b. subsequent acts of repair and replacement in whole or in part of a signage system are both a primary infringement and a separate act of infringement of the kind listed in paragraph 20, as they amount to authorization to the relevant third party for them or another to engage and/or continue to engage in use of the signage system, which is a separate act of primary infringement; and c. servicing and maintenance of a signage system or the giving instructions or assistance to a third party to do this is also a separate act of infringement of the kind listed in paragraph 20, as it amounts to authorization to the relevant third party for them or another to engage and/or continue to engage in use of the signage system, which is a separate act of primary infringement. 15 For completeness, I note that Axent further states that there are three other issues relevant to the respondents' liability for patent infringement: (1) whether any of the infringing acts are statute-barred; (2) the precise period for which the patent was in a state of lapse due to Axent's failure to pay a renewal fee; and (3) whether the amendment of the patent ought to affect Axent's ability to recover damages. 16 In their position statement, the Compusign respondents set out that: 4. From about 22 April 2004 and until about July 2013, Compusign Australia Pty Ltd (Compusign Australia) imported into Australia components for and manufactured, promoted, sold, supplied, repaired and replaced in whole or in part in Australia variable speed limit signs for traffic control on roadways (the Compusign Products). 5. From about July 2013, Compusign Systems Pty Ltd (Compusign Systems) has imported into Australia components for and manufactured, promoted, sold, supplied, repaired and replaced in whole or in part in Australia the Compusign Products. 6. The Compusign Products were so designed, made and/or supplied from time to time by the Compusign Parties for specific traffic works and projects in accordance with technical specifications of road authorities and other third parties. The products are made specifically for each such project in accordance with the technical requirements of that project. 17 The Compusign respondents also set out why they claim not to have infringed the patent in suit. In addition they rely on the following five defences: a) any alleged infringing conduct before 2 December 2010 is statute-barred, by operation of s 120(4) of the Patents Act 1990 (Cth) (the Act): at [8d]; b) that due to the Applicant's non-payment of renewal fees for the Patent and the ceasing of the Patent, the Applicant cannot bring infringement proceedings for any infringements during the ceased period of 7 October 2015 until 15 September 2016, by operation of ss 223(10) and 143(a) of the Act and regulation 13.6(1) of the Patents Regulations 1991: at [6a]; c) that by reason of the amendment of the complete specification of the Patent, by operation of s 115(1) of the Act, no pecuniary relief is available for any alleged infringements of the Patent before the amendments: at [8e]; d) Compusign Australia was making or had taken definite steps to make a product as claimed, by reason of its use of the Compusign Prototype before the priority date, so that by s 119 of the Act there would be no infringement of the Patent: at [8h]; and e) if any claims of the Patent are infringed and valid (which is denied), any exploitation of the Patent by the Compusign parties was authorized by an authority of the State for the services of that State, and by operation of s 163 of the Act such exploitation was not an infringement: at [22]. 18 In its position statement, Hi-Lux referred to its admissions regarding the features of its variable speed limit signs, as set out in an annexure to its defence. Hi-Lux noted that Axent did not refer to a lane use sign until Axent made its position statement, noting that to date "Hi-Lux has only offered to supply such a sign, and made a prototype product". Hi-Lux went on to say that, if (as Axent said) the claims are product claims and the variable speed limits signs that Hi-Lux supplies have all of the features of the claims (as Axent alleges), then Hi-Lux's admitted conduct of manufacturing, selling, supplying, offering to sell and supply, and keeping for those purposes, is a sufficient admission as to its relevant conduct. Hi-Lux further alleged that, if contrary to Axent's earlier asserted position, the "allegations of infringement ... are premised on the claims being method claims," then Hi-Lux disputed that it has instructed or authorised any person to use any of its variable speed limits signs, or its lane use signs, in any particular way. 19 Further, at paragraph 13 of its position statement, Hi-Lux stated that it conducted "only limited repair services" and that "[f]or most of the signs that it has supplied, a company called Tyco Integrated Systems Pty Ltd [was] engaged by the customer to maintain and repair the signs". Hi-Lux also set out its various defences, including under s 163(1)(b) of the Patents Act 1990 (Cth) (the Patents Act), "because it supplies its [variable speed limit signs] to the State of Victoria (VicRoads), and to the State of South Australia (Department of Transport)". the PARTIES' SUBMISSIONS Axent's submissions in support of its application for discovery 20 In written submissions accompanying Axent's letter seeking discovery, Axent submitted that there were four aspects to the disclosure that it required: a. to enable Axent to address evidence to the issue of the controller, its location and its function; b. so that the Court is in a position to determine the full range of the different types of infringement that have occurred; c. to ascertain and allow the Court to determine the conduct surrounding the allegations of authorisation and indirect infringement, including the instructions given by the respondents to end users and others; and d. to assess the applicability or otherwise of the "authority of state" defence in the different factual and contractual scenarios that exist. 21 In relation to the last-mentioned issue, Axent submitted that "it is important to identify to whom each of the respondents has promoted or sold the infringing products, including who they have contracted with". Axent continued: The "authority of state" defence is asserted to apply to contracts with VicRoads and its interstate equivalents. However, there are a number of different factual scenarios which the Court will need to consider in determining the applicability or otherwise of this defence, including a. a "direct" order as between an authority of state and a respondent; b. where a respondent has sold an infringing product to an intermediary, who in turn supplies to an authority of state; and c. contracts (with or without intermediaries) where the end user is a non-government organisation, such as Transurban Limited. 22 In written submissions, Axent submitted that: Similar considerations apply in relation to maintenance and repair contracts, which both respondents acknowledge exist, and to other instructions given by the respondents such as might enliven a finding of indirect infringement. In that regard, Axent disagrees with Hi-Lux's assertion that authorisation and indirect infringement issues are otiose if the patent is for a product. For reasons set out in the respondents' position statements time periods are important, and both the nature and timing of the different acts of infringement fall[] for determination. It is possible, given the issues around time periods, if one or more of the pleaded defences succeeds, that a direct infringement will not sound in damages or an account of profits but that a later (or earlier) indirect infringement (e.g. the repair of an earlier supplied sign, or the giving of instructions to enable use of an infringing product) will so sound. 23 The Compusign respondents' position statement was accompanied by a "Summary of Compusign Products", which lists the supply of Compusign products by reference to road project, date of first supply, location, "others known to be involved", "end user(s)/Road authorities" and other data. At the hearing of Axent's discovery application, counsel for Axent, Ms Susan Gatford, referred the Court to this last-mentioned document to explain how the industry was said to work in respect of the supply of signs. By reference to this document, Ms Gatford explained that: So ... we've got initial manufacturer, which is Compusign or Hilux. We've then got a third party or parties with whom that manufacturer contracts, and that is the people under the heading Others Known to be Involved, in that table, and then we have end users, who are the roads authorities, and they may be private companies such as Transurban or statutory authorities such as VicRoads. Those documents also show that the manufacturers make and supply a signage system, provide the detailed specifications and provide written instructions, manuals as to how to operate them. That comes from the documentation that is "the following specifications" in that table, your Honour, and then: Maintain the system post-supply, including repairing and replacing. 24 Ms Gatford submitted that the Compusign respondents had made a "generalised admission of repair and maintenance on behalf of Compusign, and then in subsequent correspondence that is annexed to the submissions in respect of discovery, Hi-Lux has said various things about what it does for repair and other things". In this context, Ms Gatford added: [T]he real guts of this discovery argument ... is this. The respondents are saying you can determine infringement on the basis of the admissions that have been made. ... That a supply is enough. And a generalised admission of that nature might, in many cases, make that correct, but it doesn't in this case because of the nature of the contractual arrangements and because of the nature of the defences that have been raised. ... [W]e need to know, as a result of the generalised nature of the admissions, to whom the supply was made because statutory authorities are dealt with differently to private companies because of section 163 of the Patents Act. ... So in terms of defences, particularly the Crown use defence, there's going to be a question ... about whether or not [ ] two-stage supply attracts the operation of section 163 ... . 25 Amongst other things, Ms Gatford also stated that: [W]e don't want the circumstance, and your Honour will be familiar with the cases where there's a hearing on liability and then you go off to quantum and you say, well, what acts is it that I'm assessing quantum in relation to? And you need, in effect, a further hearing on liability ahead of the assessment. … I don't want to make it harder than it is. I'm trying to make it easy and the way to make it easier, I think, for the court is to give us the discovery and we can make it easy for you in respect of picking representative samples. And if we do that wrong, that's our lookout. And we can deal with it in that way. We need to deal with – your Honour is going to need to decide in the liability case whether all of these suppliers are covered by the authority of state defence; that's step 1. That's not a timing issue, that's a who the parties are type issue. And then there's going to be an issue as to what the – because that requires a written authority under the section. And we've sought in the orders that I've handed to your Honour a copy of the written authority for each supplier in respect of which they rely on that defence because in their position statements, they just say section 163 applies full stop. But it obviously can't apply to circumstances where the end user is [] Transurban or some non-authority of state, and it can't, we say, apply in circumstances where their supply is to someone else who on supplies. Now, that might be a matter of legal argument that your Honour needs to determine, but there are a number of different factual scenarios that are required. Your Honour needs sufficient basic facts and it might only be a representative example, but in respect of the authority of state issue in particular, we need the authorities. 26 Ms Gatford submitted that discovery was also required in order to identify documents in the respondent's possession that assist in disproving their pleaded defences. Ms Gatford also observed that there was a dispute between the parties about the period of time in which the patent in suit had lapsed and that this issue would fall for determination. In consequence, so she submitted, "some infringements will be in and some infringements will be out". 27 In addition, regarding the issue of repair and maintenance, Ms Gatford submitted that: So [the respondents] then say that all of these allegations around repair and maintenance are tenuous and therefore they shouldn't be the subject of any discovery. We say that puts the cart before the horse and pre-empts the court's judgment: it's for the court to have the evidence before it in order to make that determination. It's not a reason to [r]efuse discovery, because the respondent thinks that the claim isn't as strong as the claim around supply or sale, and the way that case is put is that use of an infringing sign is obviously an infringement by the end user, and if it's broken or in need of maintenance or repair then anyone who undertakes that task is authorising that user to continue to infringe. 28 As to "the controller" issue, Ms Gatford contended: ... in respect of the controller issue Hi-Lux has made certain admissions which it now seeks to withdraw from in part, particularly in relation to how its signs are controlled. It hasn't provided any technical documentation at all. Compusign has relatively recently, in the bundle of documents attached to the discovery submissions, provided informal discovery of three specifications, which is says are representative examples of all signs that it has supplied... Those specifications themselves are incomplete. For example, they refer to a communications protocol called the UGL Compusign sign protocol. It's that – that's going to shed some light on the controller issue, and presumably similar documents also exist in the case of Hi-Lux, so that that should all be incorporated in the one set of contract documents that we get for each type of contract. And, as I have said, there's no evidence that it's burdensome or that it can't be done quickly. The respondents' submissions in opposition to discovery 29 In relation to the respondents' reliance on s 163 of the Patents Act, counsel for the respondents, Mr Craig Smith, submitted that the "respondent's position is only going to be as good as the documents it puts forward in its evidence in defence". Mr Smith submitted that there would be "one of the two scenarios", namely, "the supply direct to the Crown or … an indirect supply to the Crown". Mr Smith submitted that if the respondents were to rely on a s 163 defence, then: [t]hey'll need to put a purchase order, if that's the document, in writing, or a purchase order from the Crown to its customer, so a company like a Visionstream Australia. It either can or can't put that material on, but there's not a great complexity to it. But going through a discovery exercise now, while it's trying to complete its evidence on invalidity issues, is only going – in my respectful submission – to increase expense for no particular benefit. 30 Mr Smith frankly explained that the respondents were still considering the circumstances that they would claim gave rise to the s 163 defence. Mr Smith submitted: [T]here may well be documents that are likely to undercut the operation of a particular defence or an allegation, but this isn't one of them. We either make good on establishing that there are facts that attract the operation of the Crown defence or we don't. 31 As to when the patent in suit lapsed, Mr Smith submitted: The court will be able to determine if there's a time frame during which the patent is not operative, and then we move to the quantum phase of the proceeding, the applicant will know that there's no point seeking to establish damages on account of profits in relation to sales, repairs, authorisations, whatever it may be within those periods. Mr Smith added: ... if we get to a quantum case, we would have to those time frames fitting into them, depending on your Honour's orders and findings. But they're not matters which, with respect, would be efficient to go into at this stage, because all it will establish is that there are some components of conduct that fall within that period and some that fall outside that period. Mr Smith noted that the dispute about the period of lapse involved only months. 32 As to maintenance and repair, Mr Smith submitted that Axent's putative argument that the maintenance and repair at issue involved relevantly "a sanctioning, approving, or countenancing of, say, VicRoads' use of the signs" was tenuous. Mr Smith submitted that the respondents' basis objection was "it's simply the fact of repair simpliciter that is said to amount to an authorisation, and we admit repair simpliciter, therefore we say there's no utility in providing discovery." 33 As to discovery of authorisations and instructions, Mr Smith stated that Hi-Lux did not provide manuals or instructions at all; and Compusign had provided some instructions, although these instructions related to technical matters, such as wiring. 34 As to the promotion, sale or supply by any of the respondents of any variable speed limit sign or lane use sign, Mr Smith stated that supply and manufacture had been admitted. Further, the category was very broad and would include invoices, supply documentations, and all kinds of other documents over a seven year period, which was inappropriate to discover when, so far as all signs were concerned, their sale and supply was admitted. Mr Smith contended that dates and the like would be relevant only at the quantum phase. Mr Smith said that: Relevantly, the court could proceed in the liability phase of the proceeding on an assumption that all of the permutations – and there's only, I think, six or seven – seven now with the lane used sign – seven permutations have been sold during the relevant – or promoted, because one of them hasn't been sold, during the relevant time period, including outside the lapsed period. I mean, they're all currently being offered for sale, for example, as I understand it. So that alone is conduct outside the lapsed period. So even just with that admission, the court could move forward on a liability assessment, but on the scope of the conduct for quantum that would be then affected by relevant periods of operation of the patent. 35 In relation to the issue of controllers, Mr Smith submitted that: [S]amples of all of these signs have also been made available for inspection and that ... has included the internals of the signs. Also, ... the applicant attached to its discovery submissions three letters in which ... there has been a detailed explanation of the controllers which goes beyond any obligations of discovery. And this correspondence also – and other correspondence like it has been relied on by the applicant relevantly as admissions and – in their position statements and that's what they're intended to be, admitted position. 36 Mr Smith explained that the letters to which he referred were a letter dated 3 August 2017, referring to another letter dated 2 June 2017, and a letter dated 15 August 2017. Mr Smith submitted that "mindful of obligations [under ss] 37M and 37N [of the Federal Court of Australia Act 1976 (Cth)], it was intended to be something that could be relied upon by the applicant as being a statement of features of the respondent's signs". Mr Smith added that: The explanation in relation to the controllers has been provided in those letters but if the applicant doesn't want to rely upon that stated position then the main category that might give rise potentially would be the instructions in paragraph 1C. 37 Mr Smith submitted he "had understood that [paragraph] related to how the signs were to be used because it was an authorisation point that was asserted as being the reason for giving that category of discovery"; and that "the only issue, then, would be in relation to the scope of (c) as to whether those instructions are as to how a customer will use the sign". Axent's submissions in reply 38 In reply, Ms Gatford, for Axent, submitted, that: [T]he admissions made don't give you sufficient facts to make the relevant determinations. And I say that in this sense: the admission – it's a supply from this person to that person that is the relevant infringement and the authorities say that every supply is a separate infringement. So that the supply and then the maintenance and then the repair, some of those events, in respect of various signs – well, maybe the same sign, the same sign in the same physical location, it might happen within the lapse period ... So your Honour is not going to be able to say, just on the basis of an admitted supply or an admitted repair or an admitted maintenance – and, again, we don't know what the facts are underneath all of those admissions – the admissions are really at too general and broad a level for your Honour to be able to make the relevant finding of infringement. 39 In answer to the Court's questions, Ms Gatford went on to say: ... I have been told – and rightly – that I need to particularise and prove one type of each type of infringement. Now, the maintenance and repair obligation might vary. ... I don't know enough of the factual basis behind that allegation ... to say things to your Honour about whether or not that amounts to an authorisation. I need – for those sorts of authorisation cases, you need the surrounding circumstances. You can't do it off the back of an admission. It might, as your Honour says, be possible to determine one – to determine this case in the sense of we can stop, one way or another, sale or supply. Sale or to supply to some people and not to others, maybe, sale or supply, in terms of damages, at some times and not others. Your Honour is now going through the process that I've been going through for the past three or four months: is this application really necessary? ... And I've formed the conclusion that we do, because for a number of reasons: I want your Honour to have the best available factual basis for a finding of infringement. If this information is not provided, in terms of discovery of a sample contract or some such, I'm going to have to think about how I put on my evidence of infringement to talk about, for example, what's inside the Axent signs, how they work ... what goes on in respect of those things, and then ask your Honour to draw inferences, in the absence of evidence from my learned friends, as to how the infringing product works, and that is not satisfactory... 40 Ms Gatford added: I should be basing my infringement case to you on what the product specifications are, not on the legal interpretation and ... of fact and law as to what those things do. So although your Honour is correct in some senses in the supply and sale category in the dates issue, that's not the case for the Authority of State defences and ... there's another thing that that category also deals with, which is the technical aspects. In substance, Ms Gatford sought the product specifications for each sale and supply. FURTHER DEVELOPMENTS 41 Since the hearing on Monday, the Court has been advised by the respondents' solicitors that the respondents agree to provide the following documents. A representative example of any version of any technical specification for each VSLS or Lane Use Sign that has been supplied to any customer by any respondent on or after 7 December 2010; A representative example of any contract entered into by any respondent in relation to the repair of any VSLS sign or Lane Use Sign the subject of this proceeding for any repair which occurred on or after 7 December 2010; and A representative example of any instruction manual documents for any VSLS sign or Lane Use Sign that was supplied to any customer by any respondent on or after 7 December 2010 42 The respondents' solicitors offered to make these documents available to the solicitors for Axent by close of business on 8 September 2017. I understand this notification was an attempt to assist in the resolution of the dispute, notwithstanding the emails from Axent that were sent to my associate may contain a contrary suggestion. Although the respondents' agreement to provide those documents goes some way to resolving the dispute, it does not resolve it completely. CONSIDERATION 43 Rule 20.13 of the Rules provides that a party may make application for an order for discovery, including standard discovery. Rule 20.14 specifically provides for standard discovery. This is a request for documents that are "directly relevant to the issues raised by the pleadings or in the affidavits"; and of which, after a reasonable search, the party is aware; and that are, or have been, in the party's control: see r 20.14(1). Rule 20.14(2) further provides that to constitute a document directly relevant to the issues in the case, the document must meet one of four criteria. That is, a document must be one on which the party intends to rely; or one adversely affecting the party's own case; or one supporting another party's case; or one adversely affecting another party's case. 44 As Menzies J said in Mulley v Manifold (1959) 103 CLR 341 at 345, "discovery is a procedure directed towards obtaining a proper examination and determination of [the] issues" in the case. The issues in the case are the issues relating to the substance of the dispute. In this proceeding, these issues are primarily identifiable by reference to the parties' pleadings and their position statements. The identification of these issues will involve consideration of the effect of any admissions that the parties have made, since the admissions may relevantly limit the issues in the case. 45 The documents that Axent seeks to be discovered are described at the beginning of these reasons. It is convenient to deal with each class in turn. (a) Documents evidencing from 2 December 2010 the promotion, sale or supply by any one of the respondents of any variable speed limit sign or lane use sign 46 The respondents have admitted the promotion, sale and supply by them of the variable speed limit sign and lane use sign. Ordinarily this would mean that no discovery would be given in respect of the above documents. Further, a respondent's obligation to give disclosure is confined to the issues raised in the particulars of infringement and the respondent need not normally give disclosure of all its sales: see Belegging-en Exploitatiemaatschappij Lavender BV v Witten Industrial Diamonds Ltd [1979] FSR 59 at 64. 47 Given some of the substantive issues raised by the respondents' defences, however, the application of those defences will depend in part on when and to whom the sale and supply was made. Therefore the latter particular issues also arise on the parties' pleadings and position statements. It follows that at least some of the requested documents are likely to be directly relevant, because they satisfy one of the criteria in r 20.14(2). 48 It may be that, as the respondents submitted, this class describes a wide variety of documents. The class is, however, limited to documents "directly relevant" to the issues raised by the pleadings and the position statements, and the respondents have not said that discovery would be unduly onerous. In any event, the applicant's proposed second order may assist in limiting the extent of discovery. (b) Documents evidencing from 2 December 2010 the maintenance or repair by any one of the respondents of any variable speed limit sign or lane use sign 49 It is clear from the parties' pleadings and position statements that there is a dispute between the parties about the maintenance and repair of the signs. I accept, as Ms Gatford submitted, that although the respondents have made generalised admissions about maintenance and repair, there remain substantial differences between the respondents and Axent about what is (and is not) infringing (and non-infringing) maintenance and repair, extending to some disagreement about what is in fact meant by maintenance and repair in the circumstances of the case. Further information is required in order to assess this aspect of Axent's claim. Axent is entitled to discovery of the documents it seeks in this category. The second order that Axent proposes may assist in appropriately limiting the time and cost that such discovery might otherwise necessitate. (c) Documents evidencing from 2 December 2010 any authorisations or instructions given by any one of the respondents as to the use by others of any variable speed limit sign or lane use sign 50 Similarly to categories (a) and (b), documents evidencing authorisations or instructions given by the respondents as to the use by others of any variable speed limit sign or lane use sign are relevant to the issues in dispute, as appears from the parties' pleadings and the position statements. Such documents relate to the substance of part of the dispute between the parties. 51 It is possible that a respondent may have provided a number of instructions or authorisations in the same or substantially the same terms and that the litigation will not be assisted by the provision of all such documents. Hence I would also provide that the respondents be excused from compliance with an order of the kind that Axent seeks with respect to authorisations and instructions where there are numerous authorisations or instructions in the same or substantially the same terms and the respondent provides a verified list of them, as well as certain other information. (d) Documents that any respondent asserts to be an authorisation in writing given to them by an authority of a State for the services of that State under section 163(2) of the Patents Act 52 Documents said by the respondents to be an authorisation in writing given to them by an authority of a State for the services of that State under s 163(2) of the Patents Act are likely to be directly relevant to the issues raised by the parties' pleadings and the position statements, within the meaning of r 20.14(2). It may be that, as Mr Smith has said, Axent will receive them (or has received them) through the provision of the respondents' affidavits. If these documents have now in fact been provided to Axent, then the occasion for discovery of these documents has passed. It seems to me, however, that the respondents should be required to state on oath that each of them has in fact provided a copy of any document said to be an authorisation in writing given to it by an authority of a State for the services of that State under s 163(2) of the Patents Act. If the documents have not been provided to date, then the respondents should be required to make the discovery sought, in order that Axent may comprehend the case against it, particularly bearing in mind that mediation is fixed for 3 November 2017. Conclusion 53 It seems to me that the documents sought by Axent are likely to be directly relevant to the issues in the case and concern the substance of the issues in dispute between the parties, and that making the proposed orders for the discovery of those documents will assist in the efficient resolution of the matter. For the reasons stated, subject to my earlier observation about authorisations and instructions, I would make the orders sought by Axent. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 11 September 2017 SCHEDULE OF PARTIES VID 1408 of 2016 Cross-Claimants Second Cross-Claimant: HI-LUX TECHNICAL SERVICES PTY LTD (ACN 006 654 691)